Jan 22 (Reuters) – A jump in the amount of pork bellies stored in U.S. warehouses pushed overall pork inventories in December to a record level, U.S. Department of Agriculture data on Wednesday showed.
Analysts think companies are storing product now in expectation of tighter supply later this year.
USDA’s monthly Cold Storage report showed pork supplies last month at 557.1 million pounds, the most ever for December and up from 551.5 million lb. a year ago.
Pork bellies, which are processed into bacon, accounted for much of increase as end-users stockpiled the product for summer seasonal bacon demand.
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USDA data showed pork bellies in cold storage at 81 million lb., compared with 48.3 million lb. in November, and 36 million lb. a year earlier.
“Freezer stocks are typically built up at the end of the year. But with the price of pork bellies at the lowest levels in nearly 18 months, it provided an opportunity for more meat to be stored away until a time when demand is higher,” said Bob Brown, an independent market analyst in Edmond, Oklahoma.
Pork belly prices averaged $113 per hundredweight (cwt) in December 2013, the lowest since May 2012, he said.
Porcine Epidemic Diarrhea virus, a deadly pig virus, is widely expected to crimp the available supply of market ready U.S. hogs in the spring and summer months.
Brown said the spread of the virus also contributed to pork supplies being stockpiled now to avoid possible reductions in supply during the summer period.
PEDv has killed an estimated 1 million to 4 million pigs across the U.S. “Hog Belt,” with cases reported in 23 states. South Carolina is the most recent state with confirmed cases, according to the USDA’s National Animal Health Laboratory Network (NAHLN).
Beef in cold storage dropped six percent to 438.123 million pounds compared to December last year. The supply was down three percent from November.
Total chicken supply at the end of December was 673.841 million pounds, almost steady with December 2012, but down seven percent from November.
